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Judgment
Ashok Bhushan, J.
I.A. No. 292/2026
Sufficient cause has been shown for condonation of delay in filing of the appeal.
Delay condoned.
Comp. App. (AT) (Ins.) No. 85/2026
This appeal by a Successful Resolution Applicant (SRA) has been filed against an order dated 11.11.2025 passed by the adjudicating authority (National Company Law Tribunal, Ahmedabad, Court – II) in I.A. No. 159/2020 & I.A. No. 717/2025 in C.P. (IB) No. 157/2018. By the impugned order, the adjudicating authority has allowed I.A. No.159/2020 approving the resolution plan submitted by the appellant and has rejected I.A. No. 717/2025 filed by the appellant.
Brief facts of the case necessary to be noticed for deciding the appeal are:
The corporate debtor – GPT Steel Industries Ltd. was put to Corporate Insolvency Resolution Process (CIRP) by order dated 02.05.2019.
Appellant submitted the resolution plan which came to be approved by the Committee of Creditors (CoC) with 82.41% voting shares on 18.02.2020.
H-2 bidder one Pancha Tatva Promoters Pvt. Ltd. filed an appeal against the approval of the resolution plan.
Resolution Professional (RP) filed an I.A. No. 159/2020 for approval of the resolution submitted by the appellant. The CoC filed an I.A. No. 239/2022 seeking direction that resolution plan of SRA be remanded back to CoC to enable the CoC to reconsider all the resolution plans.
Adjudicating authority remanded the resolution plan to the CoC by order dated 27.07.2022 and disposed of the I.A.159/2020 on 07.04.2022. The Gujarat Industrial Development Corporation (GIDC) who had granted lease to the corporate debtor has issued a show cause notice and termination order.
RP on 31.05.2022 filed an I.A.461/2022 challenging the termination of lease deed by GIDC. I.A. No. 461/2022 was disposed of by the adjudicating authority directing the RP to approach the appellate authority against the termination of lease.
The RP filed an appeal in this Tribunal challenging the order of the adjudicating authority. This Tribunal vide its order dated 21.03.2025 set aside the order of the adjudicating authority and revived I.A. No.159/2020 for approval of the resolution plan. This Tribunal also set aside the termination of lease by GIDC.
On 29.05.2025, appellant filed an I.A. No. 717/2025 seeking direction against the RP for proper implementation of resolution plan and highlighting certain irregularities allegedly committed by RP.
Adjudicating authority after hearing the parties has allowed I.A. No. 159/2020 and approved the resolution plan and has rejected I.A. No. 717/2025. Challenging the said order dated 11.11.2025, this appeal has been filed by the SRA.
We have heard learned Sr. counsel Mr. Asheesh Jain appearing for the appellant as well as learned counsel Mr. Tishampati Sen appearing for the RP and learned counsel Mr. Deep Roy appearing for the CoC.
Learned Sr. counsel Mr. Asheesh Jain appearing for the appellant challenging the impugned order submits that RP did not share the proceedings initiated by the RP against the show cause notice issued by the GIDC. RP did not allow the visit of SRA to the assets. There is uncertain status of assets of the corporate debtor in view of likely action of the GIDC. SRA could not know about current status of violation/breaches in the property. Subject asset of the corporate debtor is the only asset in lease which is the only asset of the corporate debtor. In event, due to any inaction on the part of the RP, GIDC resume the land in future, SRA would have hard time and may be left with no remedy. RP acted in contravention of Section 29 of the IBC by declining to share the information qua proceeding before the NCLAT. RP failed to make SRA as party in the appeal which was filed before this Tribunal, challenging the order of the adjudicating authority deciding the I.A. filed by the RP against GIDC. RP and CoC has conducted the process arbitrarily had concealed the asset violation and lease termination notice. Inspection of site was denied. Resolution plan approved is at variance with the plan approved by the CoC and such variation has been made unilaterally by RP without informing the SRA. RP failed to submit Form-H with the plan approval application.
Learned counsel for the RP refuting the submissions of the counsel for the appellant submits that RP has shared the pleadings in the earlier appeal Comp. App. (AT) (Ins.) No. 1103/2024 filed by the RP and allegations of the appellant that pleadings were not shared is incorrect. The allegations of the appellant that it was denied inspection of the plant is also misleading and false. Appellant was invited to inspect the plant by email sent by the RP on 26.12.2024. There is no amendment in the resolution plan, allegation made by the appellant to the contrary is incorrect neither the RP nor CoC has ever amended/modified or altered the resolution plan which was approved by CoC on 18.02.2020. The show cause notice dated 07.04.2022 issued by GIDC was challenged by RP before the adjudicating authority and has ultimately been set aside by this Tribunal vide judgment dated 21.03.2025. As on date, the lease of the land granted by GIDC in favour of corporate debtor is valid subsisting and continues to remain enforce. The resolution plan approved by the CoC is binding on the appellant who is the SRA and appellant has no occasion to challenge the approval of the resolution plan. Appellant has not yet implemented the resolution plan despite its approval on 11.11.2025.
We have considered the submissions of the counsel for the parties and perused the records.
The appellant is SRA whose plan was approved by the CoC with vote share of 82.41% on 18.02.2020. Plan approval application I.A. No. 159/2020 was filed by the RP on 17.11.2021 due to various orders passed by the adjudicating authority, the I.A. 159/2020 could be approved by the impugned order. In earlier litigation which was initiated by H-2 bidder, appellant contested the claim and had prayed for approval of the resolution plan submitted by the appellant. Allegation of the appellant that there is uncertainty regarding the status of the lease deed also is not correct. As noted above, the GIDC has cancelled the lease deed vide termination notice 07.04.2022. RP promptly challenged the order dated 07.04.2022 before the adjudicating authority in I.A.461/2022 which was disposed of by the adjudicating authority directing the RP to approach the appellate authority. Adjudicating authority, however, has directed that no coercive action be taken during the moratorium period and status quo was granted. Order passed by the adjudicating authority dated 08.04.2024 was challenged in this Tribunal by Comp. App. (AT) (Ins.) No. 1103/2024 by the RP, which appeal came to be allowed by judgment of this Tribunal dated 21.03.2025. Operative portion of the judgment of this Tribunal in paragraph 21 is as follows:
“21.In result, both the Appeal(s) are allowed in following manner:
(1)Company Appeal (AT) (Ins.) No.1103 of 2024 is allowed.
•Order dated 08.04.2024 in IA No.461(AHM)2022 is modified by allowing IA No.461(AHM)2022 and quashing the termination order issued by GIDC as well as Show Cause Notice dated 07.04.2022.
(2)Company Appeal (AT) (Ins.) No.1084 of 2024 is allowed.
•Order dated 08.04.2024 passed by the Adjudicating Authority in IA No.159/NCLT/AHM/2020 is set-aside.
•IA No.159/NCLT/AHM/2020 is revived before the Adjudicating Authority for fresh consideration in accordance with law. The application being pending for more than four years, the Adjudicating Authority shall endeavour to dispose of the application – IA No.159/NCLT/AHM/2020 at an early date.”
The termination notice issued by GIDC terminating the lease deed has been set aside and the lease is revived and the corporate debtor still continues to hold the lease. I.A. 159/2020 was revived by order dated 21.03.2025 for fresh consideration and accountment to the order dated 21.03.2025 parties were heard on I.A. No. 159/2020 and by the impugned order I.A. No. 159/2020 has been allowed and resolution plan approved.
The submission of the counsel for the appellant is that status of lease deed has become uncertain due to breaches committed with respect to asset and appellant in future may likely to face an adverse action by GIDC. The status of lease land was clearly reflected in the CIRP process. Appellant who is SRA had given its resolution plan knowing fully well that corporate debtor holds a lease of 99 years. The show cause notice dated 07.04.2022 and the termination of lease 07.04.2022 having been set aside by this Tribunal, lease has been revived and current. The submission of the counsel for the appellant that details of RP did not share the pleadings in company appeal filed by RP challenging the order of adjudicating authority and GIDC. RP who is entrusted to take control and conduct the assets of the corporate debtor is required to take all necessary action for protecting the assets of the corporate debtor. Filing of the appeal before this Tribunal being Comp. App. (AT) (Ins.) No. 1103/2024 by the RP was to that end and the appeal having been allowed on 21.03.2025 setting aside the termination notice, the lease has clearly revived. Appellant being SRA has to take the assets of the corporate debtor and the mere fact that in future GIDC may take any action cannot be ground on which appellant can challenge the approval of the resolution plan.
Learned counsel for the appellant contend that appellant has also filed an I.A. being I.A. 717/2025 which has been rejected without there being any consideration. In I.A. No. 717/2025, appellant has sought direction to the IBBI to take action against the RP, file a status report and file Form-H. Application, further ask a prayer against the GIDC to give undertaking that they will not terminate the lease. It is useful to note the prayers in I.A.:
“a)To direct the Insolvency Bankruptcy Board of India to take appropriate action against the Resolution Professional for the following misconducts:
(i)To deny the inspection of the plant to the Resolution Applicant, when 5 years have been passed since approval of the Resolution Plan.
(ii)Misstatement on behalf of the Resolution Applicant before the NCLAT, when Resolution Applicant was not made party in the Appeal in C.A. (AT) (INS) 1103 of 2024.
(iii)To deny to share the pleadings with the Resolution Applicant filed before the Hon'ble NCLAT in C.A. (AT) (INS) 1103 of 2024 and C.A. (AT) (INS) 1084 of 2024.
(iv)To deny to share with the Resolution Applicant any information on the issue of GIDC.
b)Direct the Respondent No.1 to file status report of the premises of the Corporate Debtor and allow the Applicant to inspect the premises of Corporate Debtor;
c)Direct Respondent No. 1 to file form H;
d)Direct Respondent No.1 to make appropriate application for exclusion of time consumed beyond statutory timelines;
e)Direct Respondent No.2 to give undertaking that they will not terminate the lease on any ground unless the same is attributable to the Applicant;
f)To declare the exercise of the Resolution of the Corporate Debtor has become infructuous as the only asset of the Corporate Debtor is on lease and such rights could not be transferred in light of the judgment passed by the Hon'ble NCLAT in Deepak Sakharam Kulkarni & Anr. Vs Manoj Kumar Agarwal, Resolution Professional of D.S. Kulkarni Developers Ltd. & Ors., bearing Company Appeal (AT) (Insolvency) No. 63 of 2024,
g)Pass any such other order(s) as may be deemed fit and proper by this Hon'ble Tribunal in the facts and circumstances of the case.”
The adjudicating authority in the impugned order has noticed the application filed by the appellant in paragraph 19 and has also noticed prayers made by the appellant in paragraph 19. Adjudicating authority has noticed the submissions of parties and made observations in paragraph 22 which are as follows:
“22.We have perused the various submissions by the RP, SRA and GIDC. This matter has seen prolonged litigation due to appeal filed by another PRA in the matter and subsequently the attachment by GIDC which was heard and adjudicated. There are no other applications pending against the resolution plan other than that mentioned in this order. We observe following important issues in adjudicating these applications:
A) This resolution plan filed by the applicant on approval of the COC which has taken the commercial wisdom after giving repeated opportunities to the PRAs, voted by a majority in approving this resolution plan which duly complies with Sec. 30(2) of IBC 2016;
B) We have gone through the information memorandum and the RFRP and the other documents. It is observed that the respondent SRA was very much aware of the lease deed between GIDC and the CD and had after a proper due diligence filed this application and also subsequently filed a confirmatory affidavit before this Tribunal, abiding by the plan submitted without raising any further issue. Hence, we observe that the SRA has been raising issues mainly on land, which is valued around Rs.29.99 crores (liquidation value) and Rs.42.84 crores (Fair value) by one of the valuers in the report dated 27 September 2019 and the fair value of the CD is assessed at Rs.144.10 crores, while liquidation value is Rs.83.22 crores. Another valuation report estimates the liquidation value at Rs.105.86 crores and the fair value at Rs.180.97 crores. SRA has submitted his bid for Rs.98.11 crores after various rounds of negotiations which is more than the mean of both the reports as regards liquidation value fully aware that the land of the CD is under 99 years lease. We also have perused judgments cited by SRA. It is submitted in the application that the net worth of the SRA as on Sept 30, 2019 is Rs.246.18 crores and would be able to fund the resolution process. This is a stand alone proposal and no link to its global entity is mentioned in the plan, making it a conditional offer to examine the net worth/its funding.
C) As per the information memorandum and terms of agreement set in the offer document, the RP has to give a fully no due certificate as regards GIDC while handing over the possession and the responsibility lies on the RP and the COC/Monitoring Committee to comply with the same.
D) Since the Hon'ble NCLAT has passed the order, it is clear that in compliance of the order, GIDC has no further course of rebuttal in this matter as the stated order passed in 2022 becoming an order during moratorium period does not survive. The SRA stated that he was not part of the pleadings and has not appealed against the order passed before the higher authority being the Hon'ble Supreme Court. In the IA filed against GIDC, the SRA was not a party to the matter but this Tribunal had heard the plan and the other IA together before orders were passed, in which SRA had an opportunity to appear and submit. Repeated litigations have accounted for the delay and insistence of the RP to wriggle out of the plan submitted due to the action of COC are now set right by the orders of the Hon'ble NCLAT and our adjudication of this matter as regards the resolution plan. Once the resolution plan is approved after due diligence and following procedures on the plan of the SRA, the decision of adjudication is limited to provisions in IBC. On admission of this application, the necessary safeguards needed for the SRA to run this entity as a going concern in terms of the provisions of IBC will be provided to ensure that the resolution process of the CD is completed and the entity is revived as per plan submitted by the SRA.”
The observations made by the adjudicating authority as noticed above indicate that all facts and circumstances of the present case has been noticed by the adjudicating authority reasons due to which the delay was caused due to repeated litigation has also been noticed. SRA who has submitted the plan whose plan has been approved is also fully bound by the plan and cannot be allowed to resile from the plan on any reason. The objections and submissions made by the SRA with respect to termination notice issued by GIDC having already taken care by the RP, and this Tribunal having already set aside the termination notice, the lease in favour of the corporate debtor survives and continues. The prayers made by the appellant in I.A. 717/2025 that GIDC should give undertaking that they shall not terminate the lease could not be allowed by the adjudicating authority. Alleged irregularity by the RP in conduct of CIRP also does not give any reason to interfere with the order approving the resolution plan. The submission of appellant that approved resolution plan has been altered is not substantiated.
We do not find any ground at the instance of the appellant to interfere with the order allowing the I.A. 159/2020. No ground has been made out to interfere with the impugned order.
The appeal is dismissed.